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January 24, 2013  Thu 4:15 AM CT

AGO: SEE CHART GET CHAIN FIND STRATEGIES
The momentum bulls made some fast money in Assured Guaranty yesterday.

optionMONSTER's tracking programs detected unusual call volume in the beaten-down financial, which trades for barely half its book value. Some 3,100 February 18 calls were bought early for $0.11 and $0.12 in volume that was well above the strike's previous open interest of just 1,113 contracts, indicating new activity.

Those calls lock in the price where investors can buy stock, so they can generate significant leverage in the event of a rally. And that's exactly what happened yesterday in Assured Guaranty. (See our Education section)

The stock was at $16.45 when the trades hit and crept higher as the session progressed, ending with a 5.47 percent gain to $16.98. The calls more than doubled in the process, fetching $0.27 by late in the day.

Overall option volume was 6 times greater than average, with calls accounting for a bullish 84 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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